Letting AT&T buy T-Mobile sucks. Even more insidious are the rumors that regulators have already given this a wink-wink approval. Why does this suck? For many years, we Americans lived in a mobile telecommunications backwater. Large portions of the industrialized world had better, more advanced telecommunications systems than we did and even emerging markets were leapfrogging over our infrastructure and approach. Then along came Apple. Regular readers here know I’m no fan of Apple’s business practices but give credit where credit is due. Apple knew it had something big and knew that it could strong-arm one of our carriers into playing business by its terms. So committed was Apple to this approach that it was willing to go with AT&T when we all knew, and have come to see more and more, that its network sucked.

Apple begat Android and for a brief period of time, we lived in a world where capabilities and platforms and ecosystems ruled, not carriers with their focus on profits at the complete expense of user experience. We were already seeing how much carriers hated that world. Have you seen the crapware loaded on your phone these days, crap that can’t be removed? Look at Skype on Verizon’s Android. I can download Verizon’s version of Skype (and not uninstall it after that), which not only just works on 3G, it requires that you turn off WiFi (so that no other applications can access WiFi while you’re Skyping). I’ve never understood this but I’m guessing that Verizon is scared enough of Skype as a competitor that they want to give it minimal functionality. This also means that I can’t use WiFi for Skype internationally, even while Verizon’s CDMA technology is deployed only in a few other countries around the world. Oh by the way, I can download Skype’s version of Skype, but that works only over WiFi.

Get used to it. This is the world we’re going to see. We’re likely to see a trifurcation of the app store world. Trifurcation? Yes, we’ll probably see app stores emerge from the carriers since they’ll each impose their own requirements for apps to be certified for their networks. At the very least, since both networks are likely to impose data caps, each with their own byzantine pricing structures, you’ll have to download the app that’s best optimized for the network pricing model. (You’re going to love that one, app developers.) And trifurcation? Well, the cable companies have already banded together to offer unified WiFi in many markets (e.g., TimeWarner and Cablevision in New York City), to better compete against mobile/telco Internet/TV incursion. We’ll likely see an app store emerge from there, with apps that are designed around a very different model, whereby you do your high bandwidth transactions when connected to WiFi, in an online/offline synchronize model as opposed to the mobile model of perpetually available bandwidth.

This is not progress. This is not innovation. In fact, it will stifle innovation and inhibit the deployment of broad-based mobile applications and infrastructure. What can we do about this? Not much, I’m afraid. I’d love to say “write your congressman and write to the FCC,” but I’m not so young and naïve as to believe that would help much. What would I like to see the regulators do here? For starters, I’d love to see them disallow the deal on anti-competitive grounds. If you believe the scenario I outline above is possible or even likely, this clearly is a combination in restraint of trade. If they won’t do that, at least impose these regulations on the merged entity:

Limitations on data caps for a period of 3-5 years. Anyone with an unlimited plan at the time of the merger gets to keep that as long as they maintain a data contract with the carrier.

A prohibition on a carrier app store.

Limitations on the crapware installed on phones and/or the ability to remove it, at least after 90 days of phone ownership.

Serious notifications of potential data overage where there are data caps. We’ve only recently gotten that protection for call overages — long overdue, and prompted by European regulators, not ours. In data, it’s much more insidious because we don’t always know when/how much data we’re using. There should be onerous requirements on the carriers here, such that we can effectively meter our usage. And there should be rollover of unused data.

I wish I believed any of this would happen, but I don’t. Instead, I think we’re about to enter a period where the ironically named Long-Term Evolution (LTE) is actually a major step backwards on the evolutionary scale. We’ll have faster speeds…and much less ability to exploit them in interesting and game-changing fashion. It’s a shame that AT&T, who was once broken up by the regulators, is so adept at the regulatory game that it is about to win via acquisition what it could never win the open marketplace.